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The Hidden Costs of Bargain Electronics
Fill Dirt writes "Mike Langberg of Knight-Ridder newspapers wrote an interesting article on the the hidden costs of bargain priced consumer electronics. I saw it in the Seattle Times business section with the title Can't lose with bargain DVD player, but low cost carries price ."
Seems to me the biggest thing is the pollution generated by these bargain electronics. If it's dirt cheap, then if it dies, you throw it away, you buy more dirt cheap.
Not so good for our environment.
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I have seen the real hidden costs of bargin equipment!
:)
As many great deals that I have found in fatwallet forums, I'll be damned that it seems I get more and more broke everytime I visit there...
Of course, whenever my bookoo of rebate money rolls in, I'll be doing much better.
Damn you fatwallet!
AC
It all goes to China, where it's disassembled by teens in makeshift tents looking for a quick way to earn a buck (and perhaps die because of the dangerous toxins in CRT screens.)
Life is just grand, isn't it?
(from the article) " If we all stopped buying DVD players tomorrow, conditions in China would probably get worse rather than better." And this folks, is where the real issues can be glimpsed.
"where words meet intent, lies rhetoric's lament"
was a strange mix of negative comments -- horrific near-slave working conditions in China, coupled with... no S-video output? Cause if it had the S-video connection, I'd be in there!
Seriously, though, as we insist on human rights (never mind fair wages and conditions)as the basis for the entire world, not just our citizens (and not just out mid/upper classes), prices will go up. That's as it should be. We have arrived at a time of unprecedented purchasing power, and have done so at the cost of people we don't have to see or hear on a daily basis. No labour rallies in the streets or our factories, and no one (including my country, Canada) seems willing to cut ties with a powerful trade nation such as China over a little thing like human rights. As long as they're not crushing people with tanks, of course. That upsets the missus.
Yes, working conditions in China probably can be poor, even hazardous. But if the fashion industry is any indication, many of the more expensive items are made under similarly bad conditions. With electronics, often, the high price and low price items are just minor variations on the same design anyway.
And what is the alternative? Do you think the Chinese that work in those shops are going to be any happier if you don't buy their products and they are out of a job? If they had an alternative, they'd probably take it.
Europe and the US went through periods of horrendous exploitation and abysmal working conditions before workers demanded, and got, improvements. China will probably follow the same path if given a chance.
Sometimes you get what you pay for, but you have to pay attention.
One thing the article doesn't seem to mention is that it is usually the no-name less expensive DVD players that allow you to play other region DVDs.
Is there a middle ground where you can get a cheaper DVD player that plays foreign DVDs, doesn't allow blocking of skipping commercials that some DVDs force you to watch, and is made with "fair-trade" labor practices?
Being able to play PAL formats as well as divx cdrs would be nice too.
Oh, and if you buy a cheap DVD player, or whatever, and it doesn't work then take it back.
Nobody died when Nixon lied.
I'm meeting you half way you stupid hippies!
Shit is so cheap these days, I actually feel bad when I shop now. I'd rather pay a lot more for niceties like DVD players knowing that they weren't built by slave labor. Workers in China are treated like shit, but what the hell do you do? Every damn thing you see is made there these days...
Below is a response I recieved from the CEO of an american toy company I contacted after I read about the conditions of a factory used by them in China. It reeks of bullshit, but what can you say in response?:
Dear Mr. XXXXX:
We were very concerned to read your e-mail regarding some misinformation you
may have received regarding our manufacturing practices.
We are a global provider of game and toy brands for children, and the
conditions under which our products are manufactured are a matter of serious
and long-term concern to XXXX. We are committed to ensuring that our
products are manufactured under safe, humane and non-exploitative
conditions.
In fact, as early as 1993, XXXX established its Global Business Ethics
Principles ("Code of Conduct"). Participation in the XXXX program is
mandatory for all of our suppliers and vendors. Among many important areas,
the Code of Conduct governs:
* child labor --no person younger than 15 or younger than the age for
completing compulsory education in the country of manufacture (where such
age is higher than fifteen) may be employed to produce XXXX products -- In
China the minimum school age is 16;
* working hours and compensation --employers must comply with all
applicable wage and hour laws or, if prevailing industry wage standards are
higher, then employers must comply with or exceed these standards --In
China, minimum wages are set by province or by city, which may cause some
confusion, when reported by those unfamiliar with the process.
* forced, prison, or indentured labor --any person employed to produce
XXXX products must be voluntarily employed, except that rehabilitative
programs which provide for employment may be assessed by XXXX on a case by
case basis;
* health and safety --employers must operate facilities in a healthy
and safe manner, including, but not limited to, providing fire prevention,
first aid, and hazardous waste disposal;
* abuse and discrimination --employers must treat employees with
dignity and respect and shall not subject employees to abuse, cruel or
unusual disciplinary practice, or discrimination;
* freedom of association --employees have the right to choose (or not)
to affiliate with legally sanctioned organizations without unlawful
interference; and
* monitoring by XXXX --XXXX has the right to conduct periodic
on-site visits of working and living conditions, audit the production
records and practices of the employers, and require employers to promptly
address compliance issues or face termination by XXXX. Following initial
audits to approve use of a factory, XXXX conducts unannounced follow-up
audits.
As indicated above, XXXX's Code of Conduct clearly sets forth the
standards under which vendors may manufacture XXXX products, with auditing
and monitoring rights for XXXX. All factories located in the Far East
manufacturing XXXX products are audited by XXXX and by independent firms
hired by XXXX
Over the years, XXXX has successfully worked with its manufacturers to
correct any unacceptable practices discovered during the course of our
audits. New factories must correct any audit findings before they are given
any XXXX orders, and existing vendors must correct any findings within a
specified time frame depending upon the severity of the issue. Although
serious violations or failures to make corrections are rarely experienced,
XXXX has in fact terminated vendors for failure to comply.
XXXX has also been a leader in the worldwide toy industry as a member of
the Toy Industry Association, Inc. ("TIA") and
Your hybrid is not saving the environment. Its purpose is to make you feel good about buying something.
Maybe the average joe is fine getting their electronics at WalMart or Kmart or S-Mart or whatever... but some folks (like me) still want to go somewhere there are authorities.
I mean, walk into a Future Shop and ask the minimum wage sales clerk what the difference between two $100 DVD players are and he'll spend 5 minutes studying the boxes, shrug and say "Uh. This one's better." "why?" "uh... it costs more?" or at best just read the features off the box.
I'd rather go into a "mom and pop" or specialty store. Here in Toronto, we have places like Bay-Bloor radio (or in Hamilton, East Hamilton Radio). A little more expensive perhaps, but they really know their stuff - these guys read the manuals on their lunch breaks. And they'll ask you what brand and model your TV is and if you give them a figure, explain what model is the best bang for your buck... or if you'd be willing to spend the extra $50 you could get [brand X] and why its good. Oh, you only have [brand Q] stereo? Well perhaps not this, but this other model since your stereo can't make use of [feature F]
Philips, which along with Sony and Pioneer has hundreds of patents covering all aspects of the DVD system, is administrating the granting of licences and the collection of royalties, which are then shared equally between the three manufacturers.
The Dutch electronics giant has set up a dedicated website -- www.licensing.philips.com -- which features a list of licensed manufacturers from its licensee database. Philips maintains the website is kept up-to-date with the latest licensing information.
A leading importer of DVD players, who asked not to be named, told ERT Weekly: "This is big news. We have found most low-cost DVD players do not hold the necessary licences.
A Philips spokesman said: "There are a number of manufacturers that don't have the necessary licences.
IIRC but cost of a licence is around $25.
From the article:
no assembly-line workers in China able to enter that country's growing middle class
Yes, the companies hiring these people are really holding them back. Just imagine if they couldn't find a job how quickly they could join the growing middle class!
Please, give me a break. The economy in China is completely different than what this 'journalist' is used to. The number of people living here just boggles the mind. I would say that over 90% of China's problems can be traced back to the fact that it's population is FAR too high. Too many people, not enough schools. Too many people, not enough jobs. Too many people, not enough land. If the workers had something past a middle school education, then yah, maybe they could enter the so called middle class. But they don't. Usually the workers are glad they have a job at all. If they don't want the job there's plenty of other people who would be glad to take their place.
Even though their wage is well below the poverty line in the west, they usually have an average salary for the area they're living in. For instance, at the kindergaten I'm working at now the Chinese teachers get around $100-120 USD / month. The cleaning staff gets perhaps around $70-80, I forget exactly. And these are considered good wages for the job they are doing. Hell, I don't think there's a single person at the school who doesn't have a mobile (cell) phone! And remember this is in a large metropolitan Chinese city, not out in the country where most of the manufacturing plants are. The cost of living is even lower where most of the plants are.
Do not anger the worm.
The reason they had that level of quality was they pre-tested and stress tested each component that went into the production of their consumer electronics. They spent literally billions of dollars on test equipment from companies like Aetrium and others.
As soon as Sony (and other electronics manufacturers as well) started seeing serious competetion coming from cheap Chinese imports, the easiest way to add to their bottom line was, among other things, to cut out the pre-testing.
The failure rate of each individual electronic component is pretty small, but when you have several thousand components that go into a VCR or camcorder, each component having a .001% chance of failing, the combined failure rate of all the components amounts to 1-2%. Now, when a particular component fails, the unit may not die, but something marginal like picture quality will suffer.
Sales at companies that sold test equipment plummeted - I know from personal experience.
Nowadays, a Sony VCR is pretty much just as crappy as a cheap Chinese import. The premium you pay goes to marketing, product design and adding sometimes unique and hopefully useful features - which usually backfires and winds up being a bloated and unusable product.
The lower cost leads to higher failure rates in a shorter time span, but now the technology has become disposable and it is not uncommon to replace these cheap items every 3-5 years instead of 5-7.
Think about it: When was the last time you actually took an electronic item in for repair?
I bought a camcorder last year. The tape handling sucks, it will casually eat the occasional tape. The batteries that came with it? Lets just say that I've had erections that have lasted longer. Its not a problem with the battery, but something about the unit is just sucking the juice.
When I inquired about warranty repair I was told that the unit had a 90 DAY WARRANTY! And YES, it was purchased NEW, not a refurb. I was, needless to say, shocked - but what else should I expect from our new, disposable goods economy.
Good security is based upon reality and common sense. Common sense is a function of having common knowledge.
Denon manufactures DVD players in Fukushima, Japan. Linn manufactures DVD players in Scotland and Krell does so in Connecticut.
So no, you can't waltz into Wal*Mart and find a non-chinese model, but if you truly do want to support labor standards with your purchases, you DO have choices. Of course, to purchase a DVD player manufactured by Krell in Connecticut, you will have to cough up $8000, not $80. The Scots will provide you with a Linn model for around $2200 and Japanese labor will produce a Denon for an average of around $800, with the cheapest being about $300.
So, really, how dedicated are you to the cause?
I know that making sweeping generalizations based on no evidence whatsoever is a Slashdot tradition, so I take it with a grain of salt. But with worsening economic conditions in the US, it seems that we are seeing more and more resentful misinformation being repeated here. Sometimes it's India, sometimes it's China.
Well, as it happens, I *live* in China. I'm American, and I've lived and worked all over the world. And frankly speaking, when you guys talk about China, 99% of the time you sound like complete and utter morons, or worse yet, complete and utter biggoted racist morons. It depends on the post.
It seems, reading Slashdot (and other American news, too, actually, and even some European papers) that it's quite in vogue to bash China for a) illegally manipulating its currency, b) having slave-labor-like working conditions c) not respecting human rights.
I'm not even going to get into the notion of illegal currency manipulation. As annoying as not being able to freely trade RMB is for me, living here, the currency is China's and they can do whatever the hell they want with it. It always amuses me when we Americans cry "international law", given our track record. International law? What international law? See Iraq. And don't give me an BS about the IMF. We are the IMF, and given the way we're currently being raped by China economically, if we wanted to pull aid or threaten pulling aid or anything like that, we could. That we haven't simply means that it's not in our best interest at this point in time. The only thing close to interational law in the world is the UN, and we've let everyone know in no uncertain terms how much we respect it as a governing body. Or then there's the international war crimes tribunal in the hague which we refuse to support for fear that an American might be brought to trial there. But I digress.
As for slave labor, it's funny that my countrymen are so quick to forget their own history. I'm not even going to get into the actual, institutionalized slave labor that existed here. Let's look at paid workers. Back in the old days, when the US was the libertarian paradise that so many Slashdotters seem to want to go back to, we had child/slave labor, no minimum wage laws, sweat shops, no unions, etc, etc. We worked our butts off for almost no compensation and you can forget about a dental plan. Why? Because we were developing, but we called it something else -- the industrial revolution.
Rich and poor were incredibly polarized then -- the days of the rich yeoman farmer were long behind us, and great cities of the US like New York were built on the sweat of the poor and the oppression of the working class. Deny it all you want, but that's how it was.
Before some idiot starts spouting about how much more free than China the US is, take a good peek in your history books at what happened to the first union organizers in this country. Don't fool yourself, the US was then and is still a plutocracy, where the rich buy power and influence. It's sickening. Sure, we have rights, and I commend the spirit in which they were written, but ask any young African American being harassed by cops in the ghetto what sorts of rights he has.
I used to be a rich little sniveling white boy growing up in the burbs of Silicon Valley, spouting Libertarian rhetoric and talking about how any one, given enough resolve, can work his way up in this great country of ours. And then I went and checked out how the other half lives. Let me tell you, it's not pretty. And the poor are born poor and they die poor, and that's the way of it. Anyone who says otherwise hasn't been there, or at least hasn't bothered to look at the statistics. Did you know that socialist europe has more class mobility than the US?
China is dirt poor, but they are working their asses off to better themselves, just like we did. And one day, mark my words, they will be wealthy, just as we are. And the scarcity of resources on this planet will mean simply that
>Globalising companies are not expanding to the third world to "send much needed money into the country"
True.
>They are looking to exploit the quality-of-life and legislative differential between 1st and 3rd world countries.
False. Why do I have to explain Chinese Labour Law to everyone here? No, Chinese law doesn't allow for 16 hour days (Article 36), 12 year old workers (Article 15), forced labour(Article 56) and 5 cents an hour (well, in general there is no minimum wage there, but it'd be a rare sight to find a 5 cent an hour worker).
They may be exploiting the quality of life there, but, as a massive choice, people there have chosen to work at factories than work on farms. The question nobody who wants to denounce globalisation ever wants to ask is Why? Why did they choose to work at a factory than work where they did before? Why? Chinese factories do not go to cities with guns and tell people to work or die. They offer a certain compensation for labour, and people choose to accept it.
>Corporations don't like anti-exploitation, safety laws, environmental protection laws -- it cuts potential profits.
True. However, as a generalisation, most people find a lot to dislike about many laws. So this is really applicable to all, not just corporations.
>Corporations only exist and only work towards making a profit for their owners. That is all they do. Ethics do not come into it.
True.
>All ethical behaviour has to come from:
>a) the people who directly control the corporation
>b) the people who control the environment of the corporation (i.e. the government)
False. You are missing c:
c) The employees working for the corporation.
The Chinese aren't the mindless automatons you may think they are. They have brains. They can reason their way out of situations they aren't happy with. There are no guns held to heads at Chinese factories.
>If you live in a 3rd world country, the only way your life will get better when the factory comes is if those in charge (your government, elected or not) demand support for you as a condition of building the factory.
Yes and no. But I'll take that and run with it:
Life certainly wasn't getting any better before the factory, so if you're suggesting it could, at all, possibly, get better because of the factory, so be it.
>If a government does not demand that corporation build houses, schools and hospitals as part of the factory deal, the corporation won't do it.
False. I'd provide a bunch more links, but I think you can clearly see what you're saying isn't true.
>It's not a charity.
True. Companies will build the hospitals, schools, etc, if they feel they can benefit from it. That's where your wallet (ie: vote) comes into play.
>The problem some third world countries are having is that they are run by tinpot dictators who will let the corporations rape and pillage their fertile lands as long as the corporation gives them a backhander or builds them a new mansion.
Now that is true, and I won't disagree.
However, only the people can fix that problem. No amount of money, wether it be a lack of it, or too much, is going to change that. If every country all of a sudden chose to quit buying Chinese tomorrow, China would not suddenly become a democracy.
If you could be told what you can see or read, then it follows that you could be told what to say or think - BoC
It isn't "miraculous" at all. It's obvious and the last two centuries have largely shown determined efforts to prevent this from happening because it is so obvious.
There are only so many things that can be imported. Take, for instance, Kuwait. 95% of Kuwaiti exports are in petroleum, which makes up over half of GDP, since it is essentially their only natural resource. Nearly 100% of food is imported as agricultural capacity is nearly zero. The United States, on the other hand, has no reason to import anything except to lower the price. There are very, very limited exceptions, mostly in precious and semi-precious metals used in manufacturing where trading is based on necessity. Relying on unnecessary imports (note that something being "cheaper" does not make it "necessary") creates a succession of structural unemployment, depressed wages and/or government subsidy to keep uncompetitve sectors from producing millions of homeless people. At some point you simply must accept that the guy across the street in New York will not be able to produce anything for you at the price available in New Delhi and that some services must be provided in terms of your local economy, unless you envision a future at the homeless shelter.
Realize what is happening: production is MOVING not dramatically INCREASING. If production moves and is not quickly replaced, your GDP suffers because, obviously, you're no longer PRODUCING. We haven't found anything yet to replace what we're shipping offshore, so hey, if you've got any ideas on the "next big thing" that can only be produced here, you just fire away.
The total global economy is now about $110 Trillion, or about ten times that of the United States. The total global population is about 6 billion. That's an average GDP per capita of $18,333/year, which is HALF the current GDP/capita of the United States, but it is twice that of Poland and nearly five times that of China and almost ten times that of India. Now, considering the amount of production moving to China and India, which represent a third of the world population, and that the United States represents 10% of the global economy, one can assume that for every $1000 increase in GDP per capita in China and India, it will cost the United States $868 in GDP per capita. Why? Getting India and China to $18k/capita through exports would take transfers of $34,000,000,000,000 per year in production, 10% of which by definition would come out of the United States (in reality the US takes 20% of their exports, while India imports half as much and China practically nothing), unless new production is created, which to date has not happened (remember all the talk of "jobless recovery?"). That $3.4 Trillion would represent nearly a third of our economy, say, equivalent to losing California, New York and Texas.
Since 1983, GDP in real terms has only increased by about 18% while imports have increased from 8% to roughly 14% of GDP. In current dollars, that's $750 billion in production already shifted, equal to $2,900 in GDP/capita. The minimum wage of $3.80 in 1983 would require $5.70 today, but that wage is now only $5.15, which is a loss of 11% in standard of living, or about $1100/year. Since this is generally the wage we pay our manufacturing line workers, do you think these things are unrelated?
I don't reject the idea of equalizing incomes globally through trade. However, the current pace is suicidal especially when thinking in terms of moving production to countries with more than five times the human resources and one tenth the cost of labor already used to export to the United States three times what is imported. That kind of relationship cannot possibly be mutually beneficial to any sustainable degree. We already have a trade deficit of nearly $550 billion, which is $2000/year for every man, woman and child in the country, thus a family of four is already supporting $8,000 in trade-related waste. Escaping that scenario would take a miracle that cannot be imported from China.